"How do we create an Islamic society? That is the problem in front of us. We have a three-dimensional approach, which I have outlined in other places. It's very simple. We describe where we are, where do we stand right now. And we still are all living in a market society created for and required by a capitalist economic system. And this is very far from the ideal. So, what is an ideal society in Islam? Well, a capitalist society is built on greed, competition, and individualism, and hedonism, pursuit of pleasure in this Dunya. An Islamic society is built on generosity, cooperation, social responsibility, taking care of those who are poor and needy and powerless, and on striving for success in the Akhara. So, obviously, in every dimension, we are living in a society which is the opposite of what is desirable. So then the question is the third dimension is transformative. So, we've described where we are, where we want to go. Now, what is the path which will lead us from where we are to where we want to go? How can we get from a market society to an Islamic society? That is the goal of this lecture.
So, as I said, the first step is to have a clear idea of where we stand. So, since we live in a capitalist society, we will look at the capitalist ideas about that society. So, this is a sensible definition of what is a society, and this is very important to understand what is a society. It is a network of social relationships. So, we have roles and responsibilities within that society. I expect that, you know, when I buy goods from the store, I expect that the store owner has provided me with good quality goods, and the store owner expects that I am giving him correct currency, not fake currency, and so on. So, there are many things. I'm supposed to be working at a job to provide money for my family and many things. So, that's generally what is a society.
Now, what is a market society? So, this is something that we need to understand because this is not contained in your regular economic textbooks and not even in your Islamic economic textbooks. So, the central characteristic of a market society is that it is based on massive overproduction. It produces much, much, much more than what is necessary for lives of people. So, to think of, to think of this, let's divide the goods into two categories. There are needs, and there are wants. So, now we define needs broadly in Islamic style, I will get to that later. But outside of the needs, there is a huge amount of production of wants. So, basically, the key to understand a market society is the "w" type production and consumption is much, much larger than what is necessary. So, we produce a lot of waste, and we consume a lot of waste. So, to understand what is necessary, Allah specifies it very clearly that we can eat and drink and enjoy comfort and even beautify our life. But we should not do israf, and we should not do tabzir. Do not spend more than what is needed, do not waste, and do not spend money on that which is haram and prohibited.
This is a standard classification that what is allowed is necessities, what we need for ourselves, comforts, anything which makes us more comfortable and beautification. You can decorate your house, you can make your clothing more beautiful. But the fourth thing is excess, which is there are many categories which fall into excess and haram. For example, having a huge wedding celebration and spending money on music and lights and things like that, which are unnecessary and which are done very commonly.
Because why? Because the society expects it from us. So, things like that are israf or tabzir. So, very contrary to the teachings of Islam, Allah says that you are welcome to follow your needs, do enjoy this world, take comfort, beautify life. But do not follow idle desires.
So, as opposed to normal economics, normal economics encourages wasteful production and wasteful consumption because market society depends on the creation of waste. But the Quran prohibits wasteful production and wasteful consumption. It says, "Do not follow your desires because they will lead you astray." It says, "Do not prefer the life of the dunya." Do not enjoy any do not prefer the life of this world. And so, if you fear your Allah and you restrain your souls from acting according to the desire, so we have a lot of desires, we want to do a lot of wasteful things, but we have to prevent this. This is exactly the opposite of economic theory. It says that you have to pursue all of your desires, fulfill your desires. But Islam teaches us, "No, you can fulfill your joyous desires, your permissible desires. But you have to stop your soul from following the wrong desires."
So now, in a market society, you need to produce wasteful goods, wasteful goods which nobody wants. And so, how are you going to do that? Well, the solution is marketing. You have to convert wants into needs. You have to make people say that for social status, you have to have a car and you have to have these things. Otherwise, you will not have any standing in society. So, this creates a cycle. People want the "w" goods, and then they have to labor to earn wages. But when they labor it in order to buy these "w" goods, and when they labor, they produce the "w" goods also. So, this leads to what Say's Law that if you create the goods, suppose you start producing the goods, then you will pay wages to the laborers. The laborers will have the wages, which they'll use to buy the goods. So, it's sort of a cycle.
But the key thing for us to understand here is that capitalism manufactures the goods, but it also manufactures the desire for wasteful goods. And this is contrary to Islam. We need to... This is the front at which modern economics collides with Islamic economics. Because modern economy says that, "Yes, you should pursue your wasteful goods desires because that's needed to run the economy. If you don't... If you stop following your wasteful desires, then you will stop producing wasteful goods, and the economy will collapse, aggregate demand will collapse." But Islam says that desire for wasteful goods is wrong and not permissible.
So, economists believe in this theory of consumer sovereignty and that whatever the desire, you have to fulfill it. It doesn't matter whether it's good or bad, whether it's haram or halal, whether it's wasteful or necessary. The goal of life is to maximize the pleasure from consumption of goods and services. You have to enter. This statement is written in all economic textbooks. We have to understand that this is not science. This is a religion. This is something which is a mistake, which many people have made. They think of economics as a science. But this idea that our goal of life is to maximize the pleasure from consumption of goods, this is a religion. This religion is identified in the Quran as the worship of the nafs. And so, economic theory is actually worshiping the nafs. It's also identified as nafs-e-ammarah. You have to do whatever the nafs commands you to do. But we are not permitted to nafs-e-ammarah. It's the lowest spiritual state which we are not allowed to have.
So, how can we change this? Well, we are... dot, dot, dot. We are trained to think of ourselves as labor. And we do the labor, and we produce wasteful goods, and we create for ourselves wage income. But we provide more profits to the capitalists in the process of laboring. So, what do they... What the capitalists do with these profits... They've already produced the goods, but they also have to produce the demand for the goods. And so, they use this... They use this profit to advertise, to create in us the desire for buying these wasteful goods. And so, we... We earned this income, and then we, by producing wasteful goods, and we spend this income by buying wasteful goods. So, it's a self-sustaining system. On the one hand, we labor to earn wages. Wages Allah, and produce wasteful goods. And these wages allow us to buy the wasteful goods. So, we have to break out of this cycle. And we can't make revolutionary changes in one step. So, we just make small changes, one step at a time. Reduce the purchase of wasteful goods and reduce our labor. Yeah, when we... We don't need to buy so much waste, then we don't need to work as hard to earn as much income. And so, this will free us both on the mental side, we don't need to buy those things, and on the labor side, we don't need to work to buy those things. And how do we do that? Well, that was covered in the first lesson. If we learn to be content with what we have, then we will not desire more goods. If we give shukr to Allah for what we have, Allah will increase our blessings. And this can be in the form of more goods or just more happiness with what we already have.
And if we trust in Allah, that when we make these changes to move one step towards Allah, then Allah will take 10 steps towards us. He will not abandon us because the shaitan makes us fear that if we should step out of this system, if we reduce our engagement, we will become poor. So one of the things that we should do in order to reduce our desire for wasteful goods is to spend on the needs of others instead of our own wants. For there will be people who don't have enough for their basic needs. There are people who can't buy their own medicine. They're people who can't buy food. So instead of spending money in luxury restaurants and in getting the finest and best goods, we should prioritize the needs of others over our own luxuries. And this is actually built into our hearts. And Hadith says that you should spend time with the poor. This will soften our hearts, and it will appeal to us. It will make us realize that our problems are very small, and it will motivate us to help others.
SUMMARY by Sayeed Siddiqi
How can we create an Islamic society? We need a three-dimensional approach: a descriptive theory of our current reality, a prescriptive ideal, and a transformative strategy to turn the former into the latter.
As for the descriptive theory: we all live in a capitalist society built on greed, competition, individualism, and hedonism (pursuit of pleasure in this dunya). This is very far from the ideal. In contrast, the prescriptive ideal, an Islamic society, is built on generosity, cooperation, social responsibility, taking care of the needy, and on striving for success in the akhira.
Clearly, we live in a society which is the opposite of the ideal in every way. So then the question is the third dimension: transformation. How will we go from where we are now to where we want to be? How can we transform today’s market society into an Islamic society?
The central characteristic of a market society is that it is based on massive overproduction. It produces much more than what is necessary for the lives of people, so we produce a lot of waste and we consume a lot of waste. To see this we must distinguish between needs and wants.
Needs are defined in a broad way, Islamically. Allah explains that we can eat and drink and enjoy comfort (Qur’an 7:31) without israf (extravagance) nor tabdhir (miserliness). We should not spend more than what is needed, and should not spend money on that which is Haram.
Imam Ghazali has a fourfold classification of material goods: necessities, comforts, embellishments, and excess. Necessities are what we need for ourselves such as food and clothing, comforts are anything which makes us more comfortable, and embellishments are like beautification of one’s house and clothing. These are all explicitly permissible. The fourth category is excess, which is prohibited. Excess is that which has no benefit except that society expects it from us, or to display status; for example, having a huge wedding celebration and displaying extravagance so that people will perceive us in a certain way.
The Quran prohibits wasteful production and wasteful consumption. It prohibits following one’s desires, because they will lead one astray (Qur’an 38:26). It prohibits preferring the life of this world (Qur’an 28:50). Rather, it teaches us to fear Allah and restrain our souls from acting according to their desires (Qur’an 79:37-41). We have many desires, and Islam teaches us we can fulfill our permissible desires, but we also have many wrong desires, and we must stop our souls from following them. This is the opposite of economic theory, which says that we should pursue all of our desires and fulfill them.
In a market society, it is necessary to produce goods which nobody has a need for. How will people be convinced to buy them? The solution is marketing: wants must be converted into needs. People must be convinced that for social status, they must possess certain things. There is a principle in modern economics called Say’s law, which is that supply creates its own demand. Capitalists produce wasteful goods and pay wages to laborers, and the laborers will use their wages to buy goods, so it is a cycle of increasing production and consumption. The point is that capitalism manufactures goods, but it also manufactures the desire for wasteful goods, which is contrary to Islam. This is the point of conflict between modern economics and Islamic economics: modern economics says that we should pursue our wasteful desires because that is needed to run the economy. If we stop following our wasteful desires then we will stop producing wasteful goods, and aggregate demand will collapse, causing the economy to collapse.
Economists believe in this theory of consumer sovereignty and that whatever the desire, it should be fulfilled. It doesn't matter whether it's good or bad, whether it's Haram or Halal, whether it's wasteful or necessary, the goal of life is to maximize the pleasure from consumption of goods and services. This statement is written in all the economics textbooks. Many make the mistake of thinking of economics as a science, but this idea that our goal is to maximize the pleasure from consumption is a religion. This religion is identified in the Quran as the worship of the nafs. It is identified as al-nafs al-ammarah - the nafs which directs you to follow your desires, but we are ordered to resist it.
So how can we change this? We must break out of the aforementioned cycle of wasteful production and consumption, but we can't make revolutionary changes in one step, so we should make small changes, one step at a time. We should reduce the purchase of wasteful goods, and reduce our labor. When we don't need to buy so much waste, we don't need to work as hard to earn as much income, and this will free us both on the mental side (we don't need to buy those things) and on the labor side (we don't need to work to buy those things).
How do we do that? Through contentment and trust. If we learn to be content with what we have, then we will not desire more. If we are thankful to Allah for what we have, Allah will increase our blessings. This can be in the form of more goods, or just more happiness with what we already have. We must trust in Allah that when we make these changes, he will not abandon us. Shaytan makes us fear that if we step out of this system, we will become poor. We should also spend on the needs of others. There are many people who do not have enough for their basic needs, so instead of spending money on our own luxuries, we should prioritize the needs of others. Our hearts are built in this way: a Hadith says that we should spend time with the poor, and this will soften our hearts. It will make us realize that our problems are trivial, and motivate us to help them.
If we act upon this strategy, we will have lower standards of living, we will have simpler lives, and this act of changing our internal, individual behavior will change our external, social reality.